Union Square Ventures, a prominent venture capital firm that was an early investor in the cryptocurrency exchange Coinbase, has made a significant investment in Mirror.xyz, a crypto publishing tool, at a valuation of $100 million. The startup, founded by Denis Nazarov, a former crypto partner at Andreessen Horowitz, provides a platform for writers to crowdfund their projects using non-fungible tokens (NFTs) that are verified via the blockchain.
In recent seed financings, Mirror.xyz has raised at least $10 million from investors including USV and Andreessen Horowitz. The platform is similar to Medium, the popular blogging tool, but it goes a step further by allowing writers to monetize their work through the sale of NFTs. The concept of content being stored on a distributed digital ledger appeals to some writers, including USV co-founder Fred Wilson, who appreciate the idea that it can’t be removed by a tech platform.
The high valuation of Mirror.xyz reflects the growing interest in startups that cater to creators, the solo entrepreneurs who are seeking new ways to make money off their online followings. These creator-focused startups are increasingly leveraging crypto technology to have tighter control over their content and forge deeper bonds with fans.
Startups such as Rally.io and Roll have built tools that allow artists to create their own crypto tokens that give holders access to certain perks, while Andreessen Horowitz has invested in marketplaces for NFTs such as Dapper Labs and OpenSea, as well as newsletter publishing platform Substack. Both Sequoia Capital and Andreessen Horowitz were among the backers of BitClout, a crypto social network that allows users to invest in individuals and reap rewards as the individuals grow more popular.
Mirror.xyz uses the Ethereum blockchain to help writers fund and create unique identifiers for their projects. Authors such as Emily Segal have used the platform to fund their projects directly from potential readers, rather than securing an advance from a publisher. In this way, they can sell their crypto coins to readers and eventually offer buyers a portion of the profits from the first edition NFT sale of their completed book.
While Mirror.xyz is not currently taking a cut of NFT sales on its platform, it may do so in the future. Alternatively, it could charge its writers a subscription fee to use its publishing and monetization tools. The company has yet to generate revenue, but it has received funding from Atelier Ventures, a venture fund focused on the creator economy, led by former Andreessen Horowitz partner Li Jin, as well as a number of angel investors.
To start writing on Mirror.xyz, a writer must participate in its $WRITE RACE, which allows community members to determine who can publish on the platform. If a writer accumulates enough votes among existing Mirror members to rank in the top 10 of that week’s race, they are given a $WRITE crypto token, which allows them to publish on Mirror.xyz. The platform is currently accepting 10 new writers per week.
An early participant in the race was Fred Wilson, the founder of USV, who began publishing his blog posts on Mirror.xyz in March. “I have written many times here that it is important to me that I control the platform that I publish on. ...No matter how horrible I become, nobody is going to take me down,” he wrote recently on Mirror.xyz.